Benchmark USGC spot gasoline prices near six-month highs on RVP changes, rising demand

A shift to summer specifications pushed all three benchmark US Gulf Coast gasoline grades to nearly six-month highs March 11.

Platts, part of S&P Global Commodity Insights, assessed differentials for USGC CBOB up 8.25 cents, finished 87 grade up 14 cents and RBOB up 22.75 cents/gal on March 11. Their outright prices rose to $2.398/gal, $2.523/gal and $2.563/gal, respectively. The first two were the highest spot market values since Oct. 2, 2023, while the latter was last higher on Sept. 18, 2023.

The USGC is one of the largest gasoline trading hubs in the world for spot market activity, trading as a differential to the underlying NYMEX April RBOB futures that settled 5.33 cents higher at $2.5805/gal. The spot market, where lots of 25,000 barrels trade, eventually feeds further downstream into the retail prices at the gas station level.

US auto club AAA noted late last week that pump prices have been marching higher along with crude, which accounts for nearly 60% of pump prices. But US driving demand is also picking up right on cue for this time of year, the group said, adding that the national retail average was $3.397/gal on March 11, up from $3.189/gal a month earlier but down from $3.474/gal a year ago.

"Spring is nearly here, with longer days, better weather, and more opportunities to hit the road," said Andrew Gross, AAA spokesperson. "And we are seeing this reflected in rising gasoline demand. But remember, we see this trend every year."

Another shift seen every year is from a high RVP winter grade to the more expensive lower RVP summer grade refined to have a lower evaporation rate and lower volatility in the hotter months. The transition happened March 11 in the Gulf Coast, when CBOB moved to 10 RVP from 12.5, finished gasoline moved to 9 RVP from 11.5 and RBOB shifted to 7.4 RVP from 11.5.

Other regions transition at different times and stages. New York RBOB barges, for instance, shifts to 7.4 RVP from 13.5 on April 2. The USAC benchmark gasoline grade rose 4.88 cents March 11 to $2.316/gal, less than the NYMEX RBOB gain amid selling interest for prompt barrels that few want to store ahead of the RVP shift. It was last higher on Feb. 27.